San Diego Council Agrees to Adopt Recommendations

October 6, 2004 (PLANSPONSOR.com) - San Diego City Council members have unanimously voted to endorse or implement many of the recommendations proposed by the Pension Reform Committee in hopes of rescuing the city's troubled pension plan.

Besides two recommendations that need to be reviewed by city attorneys, the Council has decided to adopt the 17 resolutions proposed by the nine-person committee (See San Diego Pension Reform Committee Releases Recommendations ). Some of the highlights of the recommendations are:

  • the infusion of $600 million into the plan over the next three years, with a minimum of $200 million in the 2005-06 fiscal year.
  • the raising of the retirement age by seven years.
  • halting the funding of payments for retirement health care benefits through the pension plan
  • the elimination of the city’s deferred retirement program.
  • the restructuring of the Retirement Board to exclude city employees, union representatives or participants in the pension system.

These are just the latest efforts in an ongoing campaign to save the faltering pension system. Numerous recommendations have already been advanced by the Council, and two measures have been placed on the ballot regarding how the plan is structured (See San Diego City Council Proposes Pension Reforms ). The Council also agreed to direct the city manager to start discussions with the city’s four labor unions to implement the approved changes.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Appointed last year, the committee had a mandate to offer recommendations on how to fix the San Diego City Employees’ Retirement System, which is running a $1.15 billion deficit and has $545 million in unfunded retiree health costs (See San Diego Approves Pension Reform Committee ).

Study: Individual K Plans Booming

June 9, 2004 (PLANSPONSOR.com) - Individual 401(k) plans were hot during 2003 - red hot, according to a new research report.

FRC estimates that the product sales – aimed at owner-only businesses – have generated $1.5 billion in assets as of year-end 2003 and will have an asset pool twice that size at the end of 2004.

Following the entrance of dozens of providers into the individual K arena in 2003, FRC predicts 40,000 to 50,000 new plans will be adopted in 2004, as financial advisors and small-business owners become more aware of the benefits of the plans, which also include the ability to consolidate multiple retirement accounts and to take loans.

Get more!  Sign up for PLANSPONSOR newsletters.

The success of the individual K plan stems from the ability for small business owners to make larger contributions to them ($41,000 in 2004, excluding an additional $3,000 catch-up contribution available to those age 50 or older) at lower income levels than they could in any other defined contribution or IRA-based retirement plan, FRC said in its  research report .

Chris Brown, vice president and Director of Retirement Market Research at FRC, said that the plans are designed for a “vast and growing” niche, including millions of highly compensated self-employed professionals, such as doctors, lawyers, and real estate agents.

“With just 50,000 Indy-k plans adopted to date, investment manufacturers and distributors still have an opportunity to get in during the early stages of what will be a rapidly accelerating and increasingly lucrative market,” Brown said in an FRC news release.

«

 

You’re viewing the third of three free articles.

  This is your final free article. 

Subscribe to a free PW newsletter - get free online access!

 Don’t leave before subscribing! 

If you’re a subscriber, please login.

Close